As many expect the current bull market to last longer, Pimco global economic adviser Joachim Fels recently told Bloomberg TV, “The fact that the fear is gone is the main reason why we should be worried.”

Fels argues that interest rates could rise faster than expected, pushing up government bond yields, and inflation could bump up. The fact that fear is at a low, he says, “means most investors are now pretty fully invested and that means they will want to get out if the markets start to correct—exacerbating the downdraft.”

Pimco, says Fels, advises an overweight position on inflation-linked bonds within fixed-income portfolios, according to the article, and the firm has cut exposure to corporate credit based on concerns that a sell-off may be in the offing.

Fels concludes, “We’ve seen a big rally, markets are still going higher, but this is now a time for caution.”